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AGLA explores Rural Taobao

At the end of October, AGLA Class 2 welcomed one of the most memorable and valuable experiences of the AGLA journey so far… The 20 of us were split into 6 groups to travel across China to experience Rural Taobao and the impact it is having on the wider community and society.

Three AGLA members: Leela, Victoria and Babette share their experiences….

Leela Greenberg

“Rural Taobao [1] will likely be the most impactful experience of the year…”- Brian Wong

Luck of the draw

Brian scattered six folded sticky notes across the meeting table, each concealing the name of a rural village in remote China. The 20 of us, split into 6 teams, were to randomly select a location from the batch and then, “figure out how to get there.” Ranging as far North as Inner Mongolia out West to the Muslim region of Qinghai and South to Guizhou, these six locations were selected from over 1300 villages networked by Alibaba to showcase the diversity of China and the impact of the Rural Taobao initiative.

Our key question. How does Rural Taobao work and how has the initiative impacted local communities?

Understanding rural China: the 386199 village

To understand Rural Taobao, we had to first learn the basics of rural China. 600 million people reside in rural villages, living on an average of $900 USD per year. The work force evacuates to factories, leaving their villages populated by new mothers, children and old people. This phenomenon is so prevalent that the hollowed-out villages bear their own nickname: the 386199 village. 38 and 61 represent women and children, as March 8th and June 1st are women’s day and children’s day, respectively. 99 represents old people based on a play on words: 99, pronounced jiujiu sounds like long ago, henjiu henjiu. Together, 386199 is a uniquely Chinese expression of the demographics of a typical Chinese village.

Understanding Rural Taobao: the Alibaba way

Given these income levels and demographics, one would not readily conclude that Chinese village populations are best fit to engage in e-commerce. So, why has Alibaba chosen to pioneer this seemingly counter-intuitive initiative? The answer lies in the essence of Alibaba, a visionary and aspirational company with “customer first” as its underlying value. To understand Rural Taobao within this context, it helps to heed the words of founder Jack Ma: 公益价值，商业手法 which our AGLA colleague Yuan expertly translated as “CSR with an eye toward future profitability.” The basic idea is that by serving communities in need via sustainable business models, Alibaba benefits society in the short term and is benefitted in return long term. Likewise, the Rural Taobao network has already begun to enable farmers to not only buy on Taobao but also export local products to the wider domestic market.

Impact of the Xiao’er: the Qinghai monk

The most impactful aspect of Rural Taobao was meeting the xiao’er, and witnessing their commitment to local communities. One story especially highlights this drive. Three of our AGLA colleagues, Jeff, Rilly and Yip, met Mr. Zhou, a xiao’er so dedicated to his Qinghai village that even severe muscular atrophy didn’t bar him from becoming one of the country’s strongest proponents of social progress, recognized by the government as among the “Top 30 Contributing Villagers” of China.

As a young man, already chair-ridden by his disease, Mr. Zhou received a special gift: a smartphone. Delighted to discover he could research anything via the internet, he pored over medical journals, hoping to heal his condition. When he realized the disease was chronic, he turned undeterred to psychology, attempting to enrich his mind instead. Psychology led to religion, and Mr. Zhou fell deeply into spirituality, pledging as a Buddhist monk. E-commerce may not seem like an intuitive next step for a monk; however, this is precisely where the nature of Rural Taobao becomes evident. This disabled, well-read monk chose to become a xiao’er, knowing it served as a clear route to benefit his community. Through the Rural Taboao model, Mr. Zhou teaches villagers to use the internet, purchase products, and export the region’s goods. Now, in 1311 villages across China, xiao’er like Mr. Zhou are working to fortify their communities via the network and opportunities of Rural Taobao.

[1]Taobao, 淘宝，literally, “searching for treasure,” an Alibaba ecommerce platform, is China’s most widely used, with more than 500m monthly customers.

[2] The Rural Taobao structure revolves around networking villages via contracted community members called xiao’er that set up local village ecommerce and community centers. From these centers, the xiao’er service the village with products, teach villagers how to use the internet, and engage in manifold forms of community engagement.

Babette Lockefeer

Life in rural China

The destination of my Rural Taobao trip was the small town of Lichuan (利川) in the South West of Hubei (湖北) province, and its surrounding villages. Lichuan area has a population of around 900.000 inhabitants. During the 4 day trip me and my team followed Sunny, our colleague working for Rural Taobao in Lichuan around on his trip to the villages, where we met with the families living there. Some of them are customers of Taobao, others are participants in the community initiatives that are employed by Rural Taobao employees. The main conclusion: ‘China’ does not exist. There is a developed China that I’m experiencing by living in Hangzhou, and there is rural China, another world, that has an overlap but is on many dimensions very different from its urban counter-part.

Life revolves around the stove

Being invited into someone’s home is always exciting, as you get to see how they live their day to day lives. Even though the villages we visited were sometimes hours apart, the houses the families lived in looked remarkably similar. All interviews where held in the living room, the central place in the house where the coal fired stove was prominently placed, slightly in the corner of the room with an L- shaped couch around it. As Lichuan is a mountainous region, summers are cool and winters are cold, and this stove is the only heating source for most of the households. On each stove a boiling kettle, surrounded by plates with sunflower seeds, chestnuts, oranges or other produce that the families farmed themselves. Almost all households have electricity, and also here the TV made it into the living room. With electricity comes connectivity, and it was very interesting to see that although many households did not have wifi, they did all have smartphones with 4G bundles. Running water is however not always available, and the bathroom was often found next to the stable, the living quarters for the families’ pigs. The many hallways were conveniently decorated with corn or other crops that where being hanged to dry, and cozied up the otherwise concrete houses.

Living away from home

Like in the rest of China, multiple generations of the same family live under the same roof, but there is one big difference. In the cities, babies and children are being taken care of by grandparents, but often times the parents are living in the same house, coming home together after a long day of work. In the villages we visited, it was rare to see a family complete. In the majority of the cases, at least one parent and sometimes two, worked away in an urban area, too far away to come visit the family, and as a result travelling home only twice a year to see their children. Babies carried around by grandparents in wicker baskets on the fields were therefore a very common sight. For children aged 8 and above, living in such remote villages meant that they sometimes had to move to another village during the week, in order to attend school that was not always available in each village.

The villagers we visited had mostly two employment options: working on their own fields growing crops to self – sustain their families and sell off excess production, or move to a city to work mostly in migrant worker jobs. As most families owned land that was just large enough to feed their own family, and since they farm using almost exclusively manual labor, many did not really have the opportunity to expand their production to participate in the national economy due to a lack of scale. Given these tough circumstances, we asked our hosts whether they would rather move to the city or live in the countryside. The answer: “the country side has fresh air, it has beautiful surroundings, and this is where I belong, where I feel happy, so I want to live a happy life here.” And I understand, because even though the means were little, the hearts were big and in that, the city dwellers could learn something from these villagers.

I’m really happy to have experienced what Rural Taobao does, and how it enables the villagers to make the life in the rural areas easier and more inclusive. And what I learned from this? Be careful talking about ‘China’ as there are always different angles to this fascinating country that are worth exploring and understanding, and I’m glad my journey at Alibaba will continue to help me with that.

Victoria Stive

A different approach

“CSR with an eye towards future profitability”. This approach is quite different from any in tech giants outside of China.

So during the trip our group – Diego, Weisheng and Victoria – tried to find out how much impact does this project really have on the rural communities, can it raise people’s standard of living, what is the involvement of the government and does the project stand a chance to be profitable someday.

One day in the village life

We started day one of our adventure in JinZhai, a county within Anhui Province, 4 hours by train from Hangzhou. JinZhai has the distinction of being known as 将军摇篮,长寿之乡 (Cradle of Generals, Longevity Town). At the Taobao service center, we met with our xiao’er, a very smart, entrepreneurial man with a strong social conscience. He studied and worked in several big cities including Shanghai but joined Alibaba in 2014 because he wanted to help increase income levels and standards of living in his hometown.

Early in the morning Diego drove the motorbike and delivered Taobao parcels to the villagers. On average that village delivers 50 parcels per day (c. RMB70 each), a big job for Diego! And a big surprise for the villagers who opened the door to a Spanish delivery man!

Later in the morning, we were invited to the local school. The children were very excited by the presence of foreigners, yet still so polite, and genuinely curious and hungry to learn from us. We laughed so much with them and tried to teach them as much as we could, although we could not remember the rest of the words from the song “Head, shoulders, knees and toes, knees and toes…”.

In the afternoon, we went to another station and learnt first-hand about the benefits of Rural Taobao and how the villagers gain easy access to a broader and cheaper variety of products. An old man was there getting help to buy a new smartphone to communicate with his children and a young couple were buying a connected rice cooker for their home. We also met with the villagers playing majong, drinking tea, watching Taobao TV screen… The Taobao initiative has been extremely beneficial in terms of gathering people: from online commerce, it has become an offline social platform. Thanks to that, Victoria had the opportunity to meet a group of dancers rehearsing for the inter-village Anhui competition, and joined the square dance广场舞. That day, the four of us were really in the flow of village life.

Our day ended with a ceremonial tea and thanks to Weisheng’s inquisitive questions, we learnt about the challenges: mainly helping the villagers sell outside of their village. Many products unique to the village (such as special herbs) are difficult to make into actual products that can be sold because there is no quality control or branding and production is usually not on a large enough scale to be worth the effort.

Innovation @ Rural Taobao

However, Han Long is working hard to find solutions for the villagers. He invited us to attend the Signing Ceremony of the Four-Party Alliance between Alibaba, the UN, the local government, and a JinZhai kiwi merchant.

This is a pilot launch to create standardization procedures to enable merchants, in this case JinZhai kiwis, to become a branded product (统一投入品、统一种植标准、统一果品质量、统一过程监管、统一品牌运作). The local government helped to organize farmers into collectives who are able to achieve standardization and cultivate kiwis to a certain quality. Rural Taobao is the glue that pushed the project along. So apart from just being a platform, Alibaba helped to bring all sides together. This project is not about GMV or profits, it is about eradicating poverty and raising the local community’s standards of living.

Edited by Rilly Chen

About the writers:

Babette Lockefeer is a member of AGLA Class #2. Babette, born in the Netherlands and a fond traveler, has experienced living in Taiwan and Beijing before. After starting her career as a management consultant in a global consulting firm, she wanted to return and experience the dynamic E-commerce industry in combination with working for one of the largest and fastest growing companies in the world in the ever changing country that is China.

Leela Greenberg is a member of AGLA Class #2. From the mountains of Colorado, with a background in international business, she lived in Spain and Latin America before moving to China. She has worked with the UN via Fulbright and with startups ranging from drones to IOT. She joined Alibaba for the challenge and with the belief that technology can create a more egalitarian world.

Victoria Stive is a member of AGLA Class #2. She is originally from Paris, and has studied and lived in Hong Kong, Canada, London. She is passionate about innovation, Fintech and the new Chinese economy, she is dedicated to helping bridge cultural gaps between China and the West and excited to be part of the Alibaba journey.